CANADA FX DEBT-C$ ekes out gain on manufacturing sales, oil

Reuters Staff

3 Min Read

(Updates with fresh comment, closing figures, details)
* Canadian dollar at C$1.2461 or 80.25 U.S. cents
* Bond prices fall across the maturity curve
By Solarina Ho
TORONTO, Feb 13 (Reuters) - The Canadian dollar strengthened
moderately against the greenback on Friday, bolstered by a
forecast-beating jump in Canadian manufacturing sales in
December and higher oil prices.
Data showed Canadian factory sales rose 1.7 percent to
C$52.39 billion ($41.91 billion), surpassing economists'
forecast for a gain of 1 percent. November's sales were revised
slightly higher to a decline of 1.3 percent from an originally
reported 1.4 percent drop.
"We could attribute some of the positive information to the
weak Canadian dollar, which is making Canada look a bit more
attractive to its U.S. customers," said USForex currency
strategist Lennon Sweeting, who expects the data to improve as
the loonie depreciates further going forward.
"Overall, there's a mandate to improve manufacturing in
Canada, as it definitely took a bit of a slowdown when the
loonie was doing well against the dollar."
The Canadian dollar, which was outperforming many
of its key counterparts, ended the session at C$1.2461 to the
greenback, or 80.25 U.S. cents, stronger than Thursday's finish
at C$1.2490 or 80.06 U.S. cents.
The loonie, which has stumbled nearly 7 percent since the
start of the year, strengthened about half a percent for the
week.
"The data was a nice surprise this morning. That was the
main impetus this morning," said Greg Anderson, global head of
foreign exchange strategy at BMO Capital Markets in New York.
Brent crude prices rose above $60 a barrel for the first
time this year, while U.S. crude rose 3 percent amid signs of
deeper industry spending cuts and another drop in the U.S. rig
count. Skeptics were cautious, however, noting that oil supplies
keep coming. Canada is a key oil exporter.
Sweeting and other strategists are advising clients to buy
U.S. dollars on these dips, given expectations that the
greenback will continue to strengthen against the Canadian
dollar and other key currencies.
Canadian government bond prices were lower across the
maturity curve, with the two-year slipping 2 Canadian
cents to yield 0.429 percent and the benchmark 10-year
29 Canadian cents to yield 1.426 percent.
(Reporting by Solarina Ho; Editing by Nick Zieminski and
Jonathan Oatis)